HR audit time!

Like all business processes, managers must assess their HR system from time to time to ensure it is serving every purpose well and complying with the latest updates in employment law.

Jess Hildyard: BrightHR Professor

This review is as much about measuring effectiveness and spotting gaps as it is looking for opportunities for improvement. Modern organisations tend to change in size (and sometimes set-up) pretty quickly, so it’s important to keep an eye to the future and prepare for change before trying to navigate it.

Pinpoint key areas

There are quite a few factors affecting the short and long term running of every modern business, which can make a full-scale HR audit a daunting task. First, break down all key areas to make the review easier to tackle:

  • Hiring
  • Leave & Absence
  • Employee conduct
  • Training
  • Equality & Discrimination
  • Health & Safety
  • Pay & Benefits
  • End of contract

Once you have a clear idea of what your HR system should cover, you can start taking practical steps to dip the thermometer into all areas one by one in order to measure the effectiveness of each.

What should your HR audit include?

Developing the criteria and metrics for each specific area of HR can be a headache, so a good starting point is to order each area into a priority list. This allows you to see which areas are likely to have the biggest impact on your business and therefore might require a deeper analysis of current processes in line with organisational goals.

The next step is to prepare a set of questions that get to the core of logistics and performance within each area. In most cases, these questions will aim to identify the impact and purpose of current structure, policies, and common practices, and also provide a valuable reference point when looking to streamline each process.

For instance, when assessing their approach to recruitment a business should ask the following questions as standard:

Which employees / managers are involved at each stage of the recruitment process?

How many internal/external hires in the past 1-2 years?

What are the standard job advertisement, application and interview processes?

How does the company check references?

Is all necessary legal information included in the employment contract?

What data is available on employee retention and turnover?

Is the size or structure of the business likely to change in the near future?

Of course there is likely to be many more questions beyond this that are specific to each particular business, but this should give you an idea of the minimum level of detail required to get a tight handle on each aspect of your HR department.

How to get your boss on board

Let’s be honest, instigating change is rarely the simplest of challenges for a HR professional. Many managers and owners tend to require an indisputable need before deciding to invest in any area of the business, HR included.

A comprehensive audit is so important to gather accurate data and qualitative information that reinforces the need for any improvement or change in the way the business is run. Use this information to build a case for what is working well, what is not working so well, what is costing the business money and what sizeable changes need to be prepared for in the near future.

Solid statistics backed up by an in-depth review that proves both current and prospective value to the business are hard to argue with.

Implementing changes

So you’ve conducted your full-scale audit, identified key areas and received approval from the relevant stakeholders to go ahead and start making improvements.

Again, this is where the earlier exercise of planning a priority list of actions and areas comes in very handy to form your plan of attack. It’s also a good idea to review this list and ensure that the priorities have not changed as a result of the auditing process.

While some tweaks may seem relatively quick and easy to implement it’s still crucial to manage all changes carefully. Bear in mind that some of these updates may affect the roles and responsibilities of other people within the organisation. A gung-ho approach is not always your best option here; make sure to talk to the relevant people about the reason for changes and ask their opinion before changing a policy or procedure that affects them.

It may also be that you decide to update your HR management system as a result of the audit. Research and compare your options to ensure that the system fulfils the main needs and priorities that you have identified.

Final thought

Regularly checking the pulse on all operations in this way is as equally important for a HR professional who has served ten years at one business as it is for a HR professional who has just started a new role in a new company.

A comprehensive HR audit provides an unparallelled level of detail on the way a business and the people within it work. This scale of evaluation is essential to ensure all areas are up to date with legislation, technology and performing as they should, as well as plugging any gaps that may be costing your business money. It’s the only way to guarantee a business is maximising its potential and shooting straight.